Correlation Between SBI Insurance and Zurich Insurance
Can any of the company-specific risk be diversified away by investing in both SBI Insurance and Zurich Insurance at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining SBI Insurance and Zurich Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SBI Insurance Group and Zurich Insurance Group, you can compare the effects of market volatilities on SBI Insurance and Zurich Insurance and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in SBI Insurance with a short position of Zurich Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBI Insurance and Zurich Insurance.
Diversification Opportunities for SBI Insurance and Zurich Insurance
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between SBI and Zurich is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding SBI Insurance Group and Zurich Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zurich Insurance and SBI Insurance is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on SBI Insurance Group are associated (or correlated) with Zurich Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zurich Insurance has no effect on the direction of SBI Insurance i.e., SBI Insurance and Zurich Insurance go up and down completely randomly.
Pair Corralation between SBI Insurance and Zurich Insurance
Assuming the 90 days trading horizon SBI Insurance Group is expected to generate 0.69 times more return on investment than Zurich Insurance. However, SBI Insurance Group is 1.45 times less risky than Zurich Insurance. It trades about 0.31 of its potential returns per unit of risk. Zurich Insurance Group is currently generating about 0.12 per unit of risk. If you would invest 545.00 in SBI Insurance Group on August 29, 2024 and sell it today you would earn a total of 55.00 from holding SBI Insurance Group or generate 10.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
SBI Insurance Group vs. Zurich Insurance Group
Performance |
| Timeline |
| SBI Insurance Group |
| Zurich Insurance |
SBI Insurance and Zurich Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBI Insurance and Zurich Insurance
The main advantage of trading using opposite SBI Insurance and Zurich Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBI Insurance position performs unexpectedly, Zurich Insurance can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Zurich Insurance will offset losses from the drop in Zurich Insurance's long position.| SBI Insurance vs. Apple Inc | SBI Insurance vs. Apple Inc | SBI Insurance vs. Apple Inc | SBI Insurance vs. Apple Inc |
| Zurich Insurance vs. Berkshire Hathaway | Zurich Insurance vs. Berkshire Hathaway | Zurich Insurance vs. Superior Plus Corp | Zurich Insurance vs. NMI Holdings |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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